"Every other businessman on the planet would kill to be able to do the same."
Well then, they need to concentrate on creating a reason to pay extra in the first place, and then lock people in through non-portable content or similar barrier to market exit. When the earlier iPhones were being sold, they were generally distinguishably better than competing products, and there was a logic to paying the iPremium. After a couple or four years use, a modest number of purchased apps, and potentially a shed-load of music which is (for most users) difficult or impossible to port to Android, there's a huge cost or convenience barrier to moving away from iShiny, no matter what the Android offer is (within reason). With contender phones (eg S5) pitched at similar prices to Apple devices, buyers won't notice the pain of an iUpgrade that includes another iMargin (have I overdone the i-words yet?), and the whole cycle continues, with more music and app purchases locking buyers in.
There's all the marketing, design, construction quality, distribution model that Apple offer, and these offer owners a rational justification for paying the iTax, but those aren't particularly good reasons to buy yet another of their phones. £400 of otherwise lost music is however a very big reason not to leap on the Android bus.